19 Tips for Getting Best Shipping Rates from Top Carriers in Canada
The world of shipping is a complicated place. It’s like a black hole that nobody seems to really understand. If you have a business that primarily relies on shipping products, I think you’ll agree with what I just said!
When you ship products with carriers like Canada Post, Purolator, FedEx, UPS, and others — you probably just hand over your packages and hope for the best that they’ll safely arrive, right?
Without knowing how the handling process works, what happens behind the scenes, and if you’re able to get the best shipping rates for your business.
Hey, that’s totally fine. After all, you’re spending a lot of money for them to take care of everything! But, have you ever wondered if you’re paying too much?
Remember, no matter how big or small your business is, you always have the right to negotiate for better shipping costs. So your company can gain huge savings and be empowered to maximize profit margins!
However, negotiating for better shipping rates is indeed a scary task. Especially if you have to deal with intimidating carrier representatives!
That’s exactly the reason why we grabbed the golden opportunity of interviewing a former high-ranking official of a top carrier. In this blog, we’ll reveal his 19 best tips on how to negotiate for better rates.
But before we begin — let’s just acknowledge that not everyone is really good at negotiating. A lot of things can happen from one negotiation to another! What’s important is that you stay prepared and do the best you can.
So, are you ready to take care of business and help your company gain more savings? Let’s do this!
1. Know How Your Rep and Their Manager Are Paid
The first thing you need to understand is your rep’s motives and intentions. As far as we know, reps are also employees who just aim to do their jobs well and get paid, right?
So when you enter a negotiation with your rep, understand that two separate forces clash inside his mind — the desire to achieve your company’s goals and the need to achieve his personal goals.
Of course, the purpose of the negotiation is to have a win-win agreement. Since your carrier already won by having you as their customer, the negotiation process should focus on how to achieve the goals and interests you have in mind.
And hey, you can gain an advantage when you’re aware of your rep’s personal motives. And how do you do that? By understanding how they’re paid and rewarded.
There are times when reps do as much as threaten clients, lie about certain details, and cover up customer complaints just so they can get extra bonuses. Yes, unfortunately, those things happen.
You should know that most reps are incentivized to bring in new businesses like yours, so use this to your advantage during negotiations!
2. Be Kind and Provide Data
Starting off on the wrong foot would be the last thing you’d want with your rep! Remember, establishing a good relationship with them will definitely give you a head start in negotiations.
So make sure to always treat them with utmost respect and kindness. One way of showing this is by providing all the relevant shipping information ahead of time.
You’ll see that when you and your rep are on the same page, everything else becomes easier!
3. Ask for What You Want
“You can never get what you don’t ask for” — keep this phrase in mind, okay?
Every company is programmed to always seize the opportunity to make money. And these companies include your shipping carriers!
So unless you specify what you want — discounts, benefits, or vouchers, don’t expect that they will volunteer and give it to you. No, it doesn’t work that way.
Before you walk into the room and negotiate, clarify first what you need and want. And never ever ask vague questions like “What can you do for me?”
4. Consider Splitting Your Volume
Shipping carriers often issue tiered rate structures to their customers every year. These are created so you can make informed decisions for your business’s best interest!
For example — let’s say that a carrier has $50,000 and $70,000 tiers for the year 2023.
If your business spends $70,000 this year and the minimum tier is $50,000, then it’s better to just partner with another carrier and let them handle the excess $20,000.
Why — you ask? Well, first is because it wouldn’t affect your rates from the first carrier.
Second, if the first carrier decides to suddenly issue a package limit, you won’t have any problems because you already partnered with a second carrier. Got it?
And third, you’ll always have a rep that’s willing to go over and beyond just to help you solve a problem. Yes, especially now since he’s aware that you can easily jump to another carrier anytime!
5. When is the time to negotiate shipping rates?
Yes, the timing of your negotiation can also affect the outcome you expect! So you might be asking — when’s the best time to negotiate? Should it be before the holidays? On January?
According to our trusted official, the best time to negotiate is typically before the end of the second quarter. Why? Because if the carriers aren’t able to satisfy their goals during the first quarter, they will be eager to accomplish them before the second quarter ends.
On the other hand, the worst possible time to negotiate would be during the fourth quarter. This is the time when carriers are usually busy preparing for the holiday season.
But hey, this isn’t always the case! The best way to know if it’s the right time to negotiate is still by asking your representative.
6. Patience Pays Off
Never rush into things! Be patient and you will eventually get better rates.
Let’s say that in just two to three months, your business is booming and sales are skyrocketing. Along with that, you’re also exceeding the numbers you promised to your carriers.
And then, you decide to negotiate for better rates with your rep.
Ah, it might work but it’s not ideal at all! Believe me, it’s the same mistake I’ve committed before.
Our trusted senior official said that you should at least wait for one year before renegotiating shipping rates with a new carrier. Why? So you have better chances to prove that your business is now doing better and you’re no longer a risk.
Just think of it as a credit score — the better track record you have, the more attractive you look as a potential client!
7. Leverage the Sales Manager's Power
While it’s true that some reps have significant control over the rates that the shipping carrier offers, don’t forget that managers will always have superior power.
So if you want to receive better deals for your account, strive to build a relationship with both the rep and their manager!
8. Know Your Shipping Figures
Before meeting your representative and negotiating for better rates, it’s also ideal to know your shipping figures.
Doing this will give your rep an idea that you’re hands-on when it comes to handling your company’s shipping procedures!
Here are some of the information that would be helpful to know:
- Average Weight of Packages: Knowing this can help carriers optimize the use of their vehicles, manpower, fuel, and other resources to ship your packages.
- Average Number of Boxes per Shipment: Keep this in mind because there are carriers who will only charge you for a single shipment if multiple packages are headed to the same destination.
- Percentage of Packages you Ship (City vs. Province): For example, one way to easily determine this in Canada is by knowing that territories in the countryside or province often have “0” on their postal code.
- The Amount you Spend on Each of Your Carrier’s Services: For example, if you’re shipping with Canada Post, these services may include Xpresspost™, Expedited Parcel™, or flat rate box. If you’re able to determine how much you spend on each of these services, the better!
Preparing this helpful information will give the rep an idea of how meticulous and organized you are when it comes to shipping.
Understanding these crucial numbers allows him to take you more seriously, which in turn helps you negotiate more effectively!
9. Hold On to the On-Time Delivery Guarantee
Never waive the On-Time Delivery Guarantee!
Yes. No matter what the representative tells you, even if they claim that you’ll get lower rates for doing it, don’t make this mistake.
Why? Because the only purpose of signing this waiver is for you to pay a bigger part of the rep’s bonus check. Again, don’t fall for this trap!
Oh, and in case you’re wondering what the On-Time Delivery Guarantee means — it’s a policy that allows you to get refunded when the carrier delivers your package later than promised. And to get this refund, all you have to do is to file a claim.
10. Commit to Fast Shipping
Just put yourself in the shoes of your rep — you have a quota to reach, and a client comes in saying that he’s ready to ship within one to four weeks.
So, what are the chances you’ll accept the client? I’d say pretty high, right?
Knowing that your business can immediately impact their numbers positively, will motivate the representative to cooperate more.
Oh, and doing this will also benefit your business’ own customers because they absolutely love fast shipping. In fact, 33% of them have high expectations for it!
11. Be Specific in Your Requests
I’ve said it before but I’ll say it again — be specific. “You will never get what you don’t ask for”, remember?
It’s very important to provide precise and specific details when negotiating rates. It helps your representative understand what you want!
Emphasize what type of service, delivery zone, or percentage of discounts you have in mind. So your representative will be on the same page with you.
12. Don't Negotiate Alone
But on a serious note — it’s an effective way to access better rates and increase your collective shipping volume.
There are two ways to partner with other businesses for negotiations — aggregators and associations.
Basically, aggregators like ShipTime are companies that have an account with different carriers.
Then, they bring all these carriers into one platform so businesses like yours can better choose their preferred option. And each time you send a package, they will charge you directly for the costs.
On the other hand, associations like the Buster Fetcher Shipping Club can give you better chances by opening more negotiation possibilities!
How? Unlike aggregators, you will have your own account with a carrier. Allowing you to communicate directly with the rep, submit complaints about late-delivered packages, and more.
13. Regularly Meet with Your Rep
It’s assumed that your representative will review your account regularly, but it’s a lot better if you take the lead and stay involved, right?
Keeping in touch every three to six months is enough to help you build a strong relationship with your representative.
You’ll be able to know the status of your account and also be informed about upcoming services, surcharges, and even what the carrier plans in the near future.
14. Be Wary of On-Time Delivery Claims
Imagine you walk into the room with your rep and he’s happy to tell you that they achieve on-time deliveries 98% of the time. Wow, very impressive, right?
But is it true? Is this statistic accurate? Short answer — no.
Most of the time, these too-good-to-be-true statements are biased. How? Well, they don’t include several factors that can lead to late deliveries just to skew or curve the result to their advantage.
At Buster Fetcher, we track and analyze millions of packages regularly. And guess what — we’re able to find lots of late packages. In fact, parcels are delivered late 20-25% of the time in some regions of Canada!
So, what does this mean? This only means that the famous 98% didn’t include delays due to issues like the pandemic, weather, oversized package, recipient on vacation, failure to deliver — I could go on and on!
The main point is to make sure you don’t get hooked easily on these attractive statements by the rep to boost the carrier’s reputation. Think smart and learn to recognize overestimated remarks.
15. Beware of Discount Traps
Sometimes, it’s great to hear your representative talking about the discounts they plan on giving you, right? I’m not gonna lie, my ears even clap automatically when I hear the word “discount”!
But you have to be cautious because most of the time, they’re only willing to give big discounts on services you don’t necessarily need.
Always be aware of what shipping services your company needs. And make sure that all the discounts you’ll accept are aligned with the best interest of your business. So pay attention to the details!
16. Watch Out for Surcharge Increases
Ah, now this can be a little tricky — let’s say it costs your business $20 to ship a certain package. Now, after careful negotiation with your rep, you were able to bring down the shipping cost to just $19. Nice!
And then moments later, the rep said that they would have to add an extra $1.50 for the residential surcharge. Woah, now all of a sudden it costs $20.50 to ship that certain package. Not to mention that the residential surcharge can go as high as $4 and a gas surcharge may also apply.
See the problem here? If you aren’t able to negotiate better rates that are low enough, carriers may just offset your savings by adding new surcharges and additional fees. So watch out!
Unfortunately, this is a usual practice for most carriers. According to PR Newswire, most companies pay 12.86% more when shipping via FedEx and 10.25% more when using UPS. All of these extra expenses are from surcharges and additional fees!
17. Share Detailed Shipping Data
Give your carrier a clear idea of who you are as a company and what you can bring to the table. The less risk you possess, the better negotiation you can have!
Just imagine that you’re visiting an online dating site — would you even dare to entertain someone with incomplete details and photos? I guess you’ll pass, right?
The best thing to do would be to send your rep a file containing relevant information about your company’s shipping record. Along with some basic details about your company, so they can formulate a more accurate rate to offer you.
But be careful not to include any confidential information that may hurt your company’s security and privacy! To give you an idea, here’s a simple example of what you can send to your carrier:
18. Leverage Sister Companies
Several huge companies have sister companies or affiliates of their own. One great example of this is Purolator, which is partially owned by Canada Post.
Now, a great way to increase your bargaining power in negotiations is by consolidating your shipping volume under one account.
Why? Because the rep will see that having you as a client will definitely have positive effects on their company.
19. Keep Client Retention in Mind
Finally, don’t ever forget that your business in itself is already a valuable asset that shipping carriers wouldn’t want to lose. Especially if you’re a large-volume shipper!
When you leave, they will have to fill up the hole you left behind and find another company that can be as good as yours. Trust me, that’s the last thing they want to happen.
So use this advantage to gain an edge during negotiations. Remind them of your great track record and how good of an asset your company has become.
Ah, so there you have it! 19 useful and reliable tips to help you negotiate better rates with carrier representatives.
Let’s face it — not everyone is capable of negotiating. And it’s absolutely hard to become good at it because a lot of things can happen from one situation to another.
Thankfully, we’ve interviewed a former high-ranking official who helped pave the way for us to negotiate better. So prepare yourself and make sure to do your best!
After all, you’re doing this to gain significant savings for your company, right? And also to be able to offer lower shipping costs to your own customers!
Oh, and did you know? Baymard Institute said that at least 60% of shoppers abandon their carts due to expensive shipping, taxes, and fees. Yes, and another 23% actually leave when they’re faced with complicated calculations.
As a thriving business, those two statistics above are the last things you’d want to experience!
So if you need some professional help in negotiating your shipping costs, worry no more, because all you have to do is subscribe to Buster Fetcher!
We are dedicated to helping your business grab every opportunity to lower your shipping costs. How? By claiming your refunds for late-delivered packages, negotiating shipping rates, and more!
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- 49 Cart Abandonment Rate Statistics 2023